Accounting theory Essay Example | Topics and Well Written Essays - 1750 words

Accounting theory - Essay Example The money is the only and ultimate source of exchange in the world, and therefore, the companies have to acquire human and other resources by paying the suppliers money. The theory of Resource Dependence argues that organizations cannot survive without receiving social support from the relevant societies. However, the companies need to create success in order to gift their investors with the construct of trust that forms a cornerstone of any kind of human relation one can think of. The organizations have to serve the needs and wants of the investors and shareholders as well. The financial recordkeeping is far reaching in terms of sustaining a relationship with the stakeholders. The accounting systems might have the flaws, but despite that, one cannot possibly give up on them because they form an integral part of the business. The field of accounting is filled with corruption and dishonesty, but it does not mean that the system is wrongful in nature. However, those who are running it might be doing corruption (Cecchetti, 2006). In this way, the accountant becomes corrupt and dishonest with his or her profession. The field of accounting has become a flashpoint of corruption in recent years because of unveiling fraudulent activities in the departments of the leading companies. The conceptual framework behind the art and science of accounting has a design to pass entries in order to depict the exact situation of the business. The experts use the term creative accounting in order to refer to the practices that accountants apply to manipulate the stakeholders. The accountants create attractive level of working capital so that the financial outlook of their companies can appear attractive in the eyes of the stakeholders. The issues in the field began to intensify after the application of Generally Acceptable Accounting Practices (GAAP). The accountants apply the